Driven by record supply deliveries and moderating demand, Charlotte region industrial vacancy continued to rise closing at 7.3 percent at the end of Q1 2024.The bulk of speculative deliveries have been in larger facilities (250,000 square feet and greater). At the same time, most of the pull-back in demand around theregion has been from larger tenant requirements. The result in this size range is an environment where tenants with larger space requirements (over 100,000 square feet)have more leverage to negotiate more favorable terms than has been seen in years.
Conversely, there has been limited delivery of smaller facilities while demandfor 50,000 square feet spaces and below remains robust. These occupiers areexperiencing the same challenges – limited leverage and continued rising rates.
We expect these same trends for both larger and smaller tenants to continuewell into 2024.
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